Limiting the Scope of Audits

Medicare recently provided clarification to the MACs and QICs regarding the type of issues they can identify for denial when reviewing a claim. The new policy impacts claims with dates of service August 1, 2015 and after.

First, a brief review on audits. The pre-payment audit occurs once the claim has been submitted but prior to payment. If the claim is selected for audit, the provider will receive a letter requesting documentation be submitted for review. After the auditor reviews the documentation, the claim will either be released for payment or denied with a specific reason. At this point, the provider may appeal the denial following the standard appeal procedures.

The process for a post-payment audit is the same, except the audit occurs after the claim has been submitted and payment has been made to the provider. In the past, once the auditor denied a post-payment claim for a specific reason they were still allowed to find other denial issues during the appeal process.

For example, a post-payment audit is conducted on a claim for an MPK. The provider receives the request for documentation, responds with the appropriate chart notes and medical reports, but the auditor denies the claim stating the notes did not include physician corroborating documentation. Upon appeal, the provider is able to show the corroborating documentation was included in the submission. The auditor may now deny the claim saying the notes did not support functional level.

Under the new process outlined by Medicare, the auditors must limit their review of the appeal to the reasons listed in the initial denial. So, in the example above, if the provider did provide corroborating documentation the appeal would be overturned.

Auditors will still be allowed to deny claims for new reasons upon appeal of a pre-payment claim. For example, if a pre-payment claim is initially denied for lack of corroborating documentation, upon appeal the auditor may still deny the claim with a new finding of failure to support functional level.

What does this mean for you?

Audits will continue, both pre-payment and post-payment. You need to continue providing extensive notes and corroborating documentation upon request. If you receive a claim denial, pay close attention to the reason. Be aware, that on post-payment claims the auditors will be limited to the initial denial reason. Follow the appeals process from redetermination to reconsideration to ALJ, if necessary.

You may find additional assistance with documentation review check out the
Quality Assurance Review program offered by The Audit Team.